Home price appreciation in the U.S. eased further in March. The S&P CoreLogic Case-Shiller survey showed that home prices rose modestly; 0.2 percent sequentially and 2.7 percent on a year-on-year basis.
On an annual basis, home price appreciation decelerated to its current 2.7 percent from April’s 6.6 percent. A range of home price surveys is in line with slower momentum in home prices inflation. City wise, prices dropped in five of the 20 major metropolitan areas. The FHFA survey showed similarly weakened home price inflation at 0.1 percent sequentially.
According to a Barclays in a research report, this is part of a wider weakening in the housing market that is also evident in starts and sales activity.
“We think deteriorating home affordability and increasing mortgage interest rates helped to slow the housing market in 2018 and represent headwinds for this year. We expect housing to plateau at current levels throughout 2019, rather than deteriorate further”, stated Barclays.
This reflects the view that home affordability should rebound, due to slowly rising wages and the continued rise in employment that both support household incomes.
“The recent easing in mortgage interest rates should also act as a tailwind to the housing sector. Finally, we view the balance between demand and supply of housing as finely matched, which should prevent a sharp correction in home prices”, added Barclays.
At 18:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at -6.41727 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
